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Note: ( ) is usually commenting on the panel and was not said.
10:02:29 <bay|AX> Keynote: Gen Fukunaga - FUNimation
10:05:10 <bay|AX> President and CEO
10:05:25 <bay|AX> (going over the bio in the AX book)
10:06:03 <bay|AX> All right, thanks for showing up
10:06:08 <bay|AX> Today.. somewhat early for some of you guys
10:06:14 <bay|AX> I know fro my employees, it usually is.. j/k
10:06:27 <bay|AX> Well.. I just want to talk a little bit about the stat eo fhte anime indsustry and how funi fits in
10:06:30 <bay|AX> the anime industry is in flux
10:06:41 <bay|AX> but we see it as a glass half full situation while others see it as a glass half empty
10:06:51 <bay|AX> the first question is how good is the content
10:07:02 <bay|AX> if the content is excellent, there will be a business to provide it to the consumer
10:07:42 <bay|AX> (going over anime and saying japan has the most competitive content)
10:07:51 <bay|AX> for the reasons of status and opportunity
10:09:00 <bay|AX> -its different in the japanese market that anime has a rather high status and is able to attract and keep talent
10:09:13 <bay|AX> the other is opportunity... the biggest help to the industry is the manga industry
10:09:21 <bay|AX> the manga industry allows inexpensive content creation
10:09:54 <bay|AX> millions of people are able to see this content and vote on it....
10:10:04 <bay|AX> the low cost system allows a huge amount of opportunity
10:10:20 <bay|AX> when you have that kind of system, you are able to filter through thousand of ideas
10:10:35 <bay|AX> as opposed to the US to where hollywood finds people with previous hits
10:11:06 <bay|AX> in the US, UGC sites might get the US there in the thousands down to a few filtering system.. .but there are key differences between the infrastructures compraed with manga
10:11:20 <bay|AX> i hope that explains why we feel the japanese is the most competitive and therefore filtering out the best content
10:11:25 <bay|AX> so what is the reuslt in the us of the content
10:11:35 <bay|AX> we are clearly seeing an explosion of fans in the causal market...
10:11:50 <bay|AX> we see overall attendance at anime conventions ... 30-50% increase(?)
10:12:00 <bay|AX> even more complling is the explosinog of vewiing on the net
10:12:05 <bay|AX> unfortunately, a lot of it is illegal
10:12:16 <bay|AX> so a good amount of that is being persued by distributors as well as licensors
10:12:26 <bay|AX> also hollywood is catching on this trend, so it will give anime a wider appeal in the future
10:12:40 <bay|AX> lots of anime titles are being made into live action titles (ex db/speed racer/gits/etc)
10:13:02 <bay|AX> those are going to help spread anime to a wider mass audience
10:13:08 <bay|AX> there are anime renditions of popular brands i the US
10:13:30 <bay|AX> we of course did witchblade which didn't do well in japan, it was one of the best selling titles in america last year (i think it was number one he comments)
10:13:42 <bay|AX> which was based on the popular US series
10:13:50 <bay|AX> also animatrix and such...
10:14:00 <bay|AX> if the content is great... and the fanbase is exploding.. what are the issues
10:14:13 <bay|AX> there are issues because the market has been 95% monitized by dvd revenue and that market has dropped off
10:14:19 <bay|AX> the future will be a blend of broadcast, dvd and digital
10:14:31 <bay|AX> the other issue is..i f you don't have those 3 key pillars, you can't compete
10:14:45 <bay|AX> especially since they have already embrassed this multifaceted marketing and exposure
10:14:52 <bay|AX> (they being major studios)
10:15:15 <bay|AX> there are some buzz words people talk about in the anime industry, and the key one... is "brand engagment"
10:15:22 <bay|AX> some thing just watching a show is not enough to get brand engagement
10:15:38 <bay|AX> the world of just tossing out a dvd and sticking it on the shelf is going away as a way to be competitive...
10:15:45 <bay|AX> thats one of the things that hurt the dvd industry...
10:15:53 <bay|AX> so lets talk more about broadcast and digital
10:16:11 <bay|AX> funi has great relationships with [as] and the like... but the slots are limited
10:16:26 <bay|AX> so, we are tapping the vod market
10:16:37 <bay|AX> carries such as comcast are eager to provide this method to consumers
10:16:47 <bay|AX> funimation channel has been agressive in getting vod
10:16:52 <bay|AX> the dvd market...
10:17:07 <bay|AX> from our part of view, the dvd market is stabilized... or even increasing...
10:17:30 <bay|AX> dvd is going to be the majority of the revenue generation regarding a title
10:17:43 <bay|AX> we think dvd sales will benefit from blu-ray since the customers tend to be early adopters...
10:18:04 <bay|AX> (bluray getting 10-20% to up to 30% at launch of the mraket for anime titles???)
10:18:16 <bay|AX> pricing and release strategy...things are going toward season set prices/relesaes
10:18:20 <bay|AX> we see things continuing that way
10:18:45 <bay|AX> we don't see that happening with big A titles... those will continue to come out in singles for a while to come
10:18:58 <bay|AX> part of it is licensors are asking that way, part of it is licensing fees and budgets tend to be high
10:19:17 <bay|AX> if we don't see a 25% sales jump in the season strategy, we will go right back to the singles strategy
10:19:21 <bay|AX> for any title
10:19:24 <bay|AX> digital...
10:19:32 <bay|AX> digital includes mobile, internet.. digital goods,
10:19:37 <bay|AX> all our partners are giving us digital rights
10:19:46 <bay|AX> in fact, funimation has stopped acquiring titles without digital rights
10:20:04 <bay|AX> it is really too critical in the whole brand engagement things.. the revenue risk without those rights is too high in today's market
10:20:10 <bay|AX> going through some of these rights...
10:20:20 <bay|AX> mobile.. we have announced a partnership with AT&T...
10:20:44 <bay|AX> and we will be on sprint.. starting today(?)
10:21:02 <bay|AX> we think it will take some time before mobile catches on (due to the lower industry)
10:21:05 <bay|AX> internet
10:21:11 <bay|AX> (lower = not japan bandwidth)
10:21:14 <bay|AX> the current action is on the internet
10:21:19 <bay|AX> if we go through the variousaspects
10:21:26 <bay|AX> lets talk about social networking, vod, dto
10:21:50 <bay|AX> a recent study we saw... 96% of
10:21:54 <bay|AX> DTO
10:22:07 <bay|AX> funimation is going to see a 100%-200% increase in revenue over the next 12 months in DTO
10:22:48 <bay|AX> funimation.com will be the intital launching site for a lot of this stuff because itunes and xbox are slow to initial new content
10:23:00 <bay|AX> digital assets.. we see explosive growth in these... (avatars, etc)
10:23:06 <bay|AX> we thikn those are perfect for the anime market
10:23:20 <bay|AX> we feel that, we are optimistic we will be announcing some major deals with major sites in a few months
10:23:29 <bay|AX> social networking.. one of the highest growth areas in the internet with a 99% growth rate
10:23:44 <bay|AX> with socail networking... there seems to be a lack of an anime centric social networking enviroment
10:23:56 <bay|AX> when i talk about animecentric, a lot of sites don't stich all the parts together...
10:24:17 <bay|AX> funimation is ...very agressively persuing strategies with strategic partnerships
10:24:44 <bay|AX> we feel that internet/vod will take over linear ... we see numbers as high as major networks...
10:24:56 <bay|AX> we are greatly going toward ad supported vod on the internet
10:25:10 <bay|AX> we are agressively moving toward subtitles of japanese anime day and date with japan
10:25:12 <bay|AX> they have partnered with youtube
10:25:27 <bay|AX> no one video site has enough traffic for anime
10:25:40 <bay|AX> (plan to partner with many sites and branding it with the anime brand)
10:25:58 <bay|AX> one problemw ith the video sites we are seeing is the lack of cross-selling with actual media
10:26:14 <bay|AX> ...the other aspect of internet we should talk about is piracy
10:26:20 <bay|AX> i know there was a panel on this subject and it is a huge problem
10:26:48 <bay|AX> the 3 pprong strategy is education of consumer, the internet free VOD ad-supported (a legal alternative), and agressively enforcing infringing sites...
10:27:00 <bay|AX> our japanese partners are giving us take down rights before the titeles are even launched in japan
10:27:12 <bay|AX> so that covers our view of the industry and how funimation fits into the industry trends
10:27:17 <bay|AX> a little bit of news... that you might have heard
10:27:37 <bay|AX> geneon titles that were released in the past... year or so.. the 20 or so titles, we have been assigned as the exclussive distributor for those titles
10:27:49 <bay|AX> we are excited to partner with geneon for marketing and distribution
10:28:02 <bay|AX> aslo this morning, we announced that ARM had announced adv some capital a few years ago and bought some titles..
10:28:06 <bay|AX> those 30 or so titles are coming to funimation
10:28:13 <bay|AX> those licenses are all transfered to funimation
10:28:32 <bay|AX> we picked up those titles through the arm transaction
10:28:37 <bay|AX> we will be launching those as soon as we can....
10:28:41 <bay|AX> thats the funimation news....
10:28:48 <bay|AX> the big stuff as well as the spring and the youtube
10:28:54 <bay|AX> so i guess... questions... ill take a few
10:29:15 <bay|AX> since you just picked up about 50-60 titles in the few dyas.. will you be using the box set strategy?
10:29:18 <bay|AX> yes, when we are allowed to?
10:29:34 <bay|AX> since geneon titles are partially done... the volumes will finsih out...
10:29:38 <bay|AX> those that are cleanly broken
10:30:06 <bay|AX> is production required for the geneon shows?
10:30:12 <bay|AX> not for geneon, they are finishing....
10:30:27 <bay|AX> for the ARM titles, we are in talks with ADV for contiued production
10:31:12 <bay|AX> question about merchandising rights that i couldn't really catch...
10:31:24 <bay|AX> for our titles, we have merchanding... for geneon, it only includes home video...
10:31:31 <bay|AX> arm, we got the whole deal..
10:31:56 <bay|AX> the problem with merchandise in the mass market is that either you become a mass brand or you are too niche to justify making product for a 26 episode anime title
10:32:59 <bay|AX> (completely missed that question.. it was regarding anti-piracy and the music industry)
10:33:58 <bay|AX> (the summary of the answer is that the piracy in the anime market requires a lot of effort unlike the music industry so that if they can make it seem pointless to do that effort, they think it will be effective...)
10:34:32 <bay|AX> (question about the VOD-ad supported model)
10:34:50 <bay|AX> (they believe it will comprise ~10% revenue of market when it launches)
10:35:52 <bay|AX> end